Real Estate Appraisal - Chapter 3: Legal Considerations in Appraisal

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Real Estate Appraisal - Chapter 3: Legal Considerations in Appraisal
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Real Estate Appraisal - Chapter 3: Legal Considerations in Appraisal
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  1. An owner who can dispose of his estate by will owns which type of estate?

    a. Perpetual estate

    b. Reversion estate

    c. Life estate

    d. Intestate estate
    (a) since an owner of a fee simple estate may dispose of it in her or her lifetime or after death by will, it is also known as an estate if inheritance or a perpetual estate. Pages 42-43
  2. 2. If an owner violates any condition on a fee simple qualified estate:

    a. the owner will be arrested

    b. the owner will be fined

    c. the owner will lose title

    d. nothing will happen
    (c) A fee simple qualified estate is a fee simple estate with conditions that control certain aspects of the owners' use of the property. If the owners violate these conditions, they will lose title to the property, based on a forfeiture clause in the granting of title. Page 43
  3. Lowell deeds his property to his first wife, Verna, with the condition that after his second wife, Elizabeth, dies, the property title will pass to his daughter, Laura. What type of estate does Verna possess?

    a. Fee simple qualified

    b. Life estate

    c. Less-than-freehold estate

    d. Estate at will
    (b) a life estate is one that is limited in duration to the life of its owner or the life of another designated person. Page 43
  4. Which type of estate does a tenant possess?

    a. Freehold

    b. Fee simple

    c. Less-than-freehold

    d. Life
    (c) A less-than-freehold estate is an estate owned by a tenant who rents real property. Page 42
  5. Who has exclusive possession and use of the rented property?

    a. Lessor

    b. Lessee

    c. Leasehold

    d. Leased Fee
    (b) the owner of the leasehold estate (lessee) has exclusive possession and use of the rented property for a fixed period of time. Page 44
  6. A property manager lives on the property free of charge. Which type of leasehold is this?

    a. Estate for years

    b. Estate at sufferance

    c .Estate from period to period

    d. Estate at will
    (d) when there is no written agreement between the landlord and tenant, the tenancy is known as an estate at will. There is no agreed-upon termination date and either party must give 30 days notice before ending the tenancy. Page 45
  7. 7. A retail tenant has to pay rent plus all property expenses, such as maintenance, insurance, and property taxes. Which type of lease does he have?

    a. Triple net

    b. Absolute net

    c. Net-net-net

    d. Any of the above
    (d) A triple-net lease, also known as a net-net-net lease or absolute-net lease, indicates the tenant is paying rent and virtually all of the expenses.
  8. Kim rents a small retail space for $900 per month plus 8% of any profits over $2,500. Kim made $3,217 dollars this month. What was her rent?

    a. $957.36

    b. $1,157.44

    c. $1,1000.00

    d. $971.46
    • (a) $3,217 - $2,500 = $717.
    • $717 X .08 (8%) = $57.36 overage rent.
    • $57.36 + $900 = $957.36. Page 46
  9. Which type of concurrent ownership includes the right of one tenant to will his interest?

    a. Ownership in severalty

    b. Joint tenancy

    c. Tenancy in common

    d. Common interest developments
    (c) Tenancy in common allows a tenant to will his or her share. Due to the right of survivorship, a joint tenant may not will his or her share. Ownership in severalty is not concurrent ownership. Common interest developments are a special ownership form that blends concurrent and separate ownership. Pages 47-48
  10. Bill, Bob, and Beau take joint tenancy of a vacation house. Bill sells his share to Blake after 3 years. Which of the following is true?

    a. Bill, Bob, and Blake are joint tenants.

    b. Bob, Beau, and Blake are joint tenants.

    c. Bob and Beau are joint tenants with Blake as a tenant in common.

    d. Bob, Beau, and Blake are tenants in common
    (c) a joint tenant may sever his or her interest in the joint tenancy by selling it. The new co-owner would become a tenant in common with the remaining joint tenants. Pages 48-49
  11. Janice owned a flower store for four years before she married Ron. After she married, she purchased another sore with proceeds from her original store. The flower stores:

    a. are both considered separate property

    b. are both considered community property

    c. The original flower store is separate property, and the new one is community property

    d. The original flower store is community property, and the new one is separate property
    (a) Income derived from separate property is considered separate income. If separate income is used to purchase property, that property is also separate property. Page 50
  12. When Frank purchased real estate, he received an undivided interest in a parcel of land as a tenant in common with all the other owners. He and the other owners have the nonexclusive right to the use and occupancy of the property. What type of ownership is this?

    a. Common interest development

    b. Condominium

    c. Undivided interest

    d. Tenancy in common
    (c) In an undivided interest, the land itself is not divided but the ownership is. The buyer receives an undivided interest in a parcel of land as a tenant in common with all the other owners. All owners have the nonexclusive right to the use and occupancy of the property. A recreational vehicle park with campground and other leisure-time amenities is an example. Page 51
  13. An interest in real property that is held by someone who is not the owner is known as an:

    a. encumbrance

    b. specific lien

    c. voluntary lien

    d. All of the above
    (a) an encumbrance is an interest in real property that is held by someone who is not the owner. Page 53
  14. A mortgage is an example of a(n):

    a. encumbrance

    b. specific lien

    c. voluntary lien

    d. All of the above
    (d) any lien is considered an encumbrance. A specific lien is one that is placed against a certain property, such as a trust deed or mortgage. Trust deeds and mortgages are also voluntary liens. Page 53-54
  15. An easement, a building restriction, an enroachment, and a lease are all examples of:

    a. money encumbrance

    b. non-money encumbrance

    c. lis pendens

    d. mechanic's lien
    (b) a non-money encumbrance is one that affects the use of property such as an easement, a building restriction, an encroachment, or a lease. Page 55
  16. CC&Rs is an acronym for:

    a. considerations, conditions, and restrictions

    b. covenants, conditions, and reconveyances

    c. covenants, considerations, and reconveyances

    d. covenants, conditions, and restrictions
    (d) page 55
  17. Eva deeds her house to Melissa with the condition that title will not pass to Melissa until she is legally married. This is an example of a: 

    a. covenant

    b. condition subsequent

    c. condition precedent

    d. restriction
    (c) a condition precedent requires that a certain event, or condition, occur before title can pass to the new owner. It is a condition that must be taken care of preceding the transaction. Page 56
  18. Because of how the street access is set up, Charlie's driveway must cross over Leigh's property. Which of the following describes this scenario?

    a. Leigh has a negative appurtenant

    b. Charlie is the dominant tenement

    c. Leigh is the dominant tenement

    d. Charlie is the servient tenement
    (b) The servient tenement is the land one person owns that is being used by someone else. The servient tenement is encumbered by the easement. The other person's land receives the benefit of the easement and is known as the dominant tenement. Page 57
  19. A cable company has an easement permitting them to install wiring for digital cable and broadband internet services. What kind of easement is this?

    a. A negative easement

    b. An easement in gross

    c. A prescriptive easement

    d. An avigation easement
    (b) easements not appurtenant to a specific parcel are known as easements in gross. Typically, these are owned by utility companies. Page 58
  20. The authority of the state to enact laws within constitutional limits to promote the order, safety, health, morals, and general welfare of our society is called: 

    a. novation

    b. police power

    c. eminent domain

    d. lawful object
    (b) police power is the authority of the state to enact laws within constitutional limits to promote the order, safety, health, morals, and general welfare of our society. Page 59
  21. Brandi has convenience store in a district that was rezoned residential. If she cannot get a special use permit, she has a:

    a. non-conforming use

    b. variance

    c. conditional use

    d. encumbrance
    (a) Rezoning an area can create nonconforming uses. Page 61
  22. If a city requires that all the buildings in its downtown retail district be a Spanish-style stucco that is uniform in color, this would be an example of:

    a. incentive zoning

    b. aesthetic zoning

    c. visual zoning

    d. reverse condemnation
    (b) aesthetic zoning is zoning that is used to regulate the appearance of buildings in the area. Page 62
  23. Which type of deed has no warranty whatsoever?

    a. Quitclaim deed

    b. Warranty deed

    c. Grant deed

    d. Deed of reconveyance
    (a) a quitclaim deed contains no warranties and transfers any interest the grantor may have at the time the deed is signed. Page 63
  24. Which of the following is the act of taking private property for public use?

    a. Police power

    b. Eminent domain

    c. Escheat

    d. Condemnation
    (d) condemnation is the process by which the government acquires private property for public use, under its right of eminent domain. Page 66
  25. Which of the following is not a basic element of any contract?

    a. Legally competent parties

    b. Mutual consent between the parties

    c. Statue of limitations

    d. Sufficient consideration
    (c) in order for a contract to be legally binding and enforceable, there are four requirements: (1) legally competent parties, (2) mutual consent between the parties, (3) lawful objective, and (4) sufficient consideration. Page 66
  26. Generally, the phrase "legally competent' excludes which of the following?

    a. Minors

    b. Individuals not of sound mind

    c. Intoxicated individuals

    d. ALl of the above
    (d) Parties entering into a contract must have legal capacity. To be considered legally competent, a person must be at least 18 years of age (unless married, in the military, or declared emancipated by the court). When it has been determined judicially that a person is not of sound mind, that person is not considered legally competent. Someone who is intoxicated or under the influence of legal or illegal drugs is not considered legally competent at that time. Pages 67-68
  27. Meagan gives Adriana the authority to act on her behalf. Adriana is the:

    a. power of attorney

    b. attorney-in-fact

    c. principal

    d. incumbent
    (b) any person may give another the authority to act on his or her behalf. The legal document that does this is called a power of attorney. The person holding the power of attorney is an attorney-in-fact. Page 68
  28. If one party unknowingly provides wrong information when entering into a contract, he or she has committed:

    a. fraud

    b. innocent misrepresentation

    c. mistake

    d. duress
    (b) When the person unknowingly provides wrong information, innocent misrepresentation occurs. Even though no dishonesty is involved, a contract may be rescinded or revoked by the party who feels misled Page 69
  29. What occurs when all parties to a contract agree to cancel the agreement?

    a. Unilateral rescission

    b. Breach

    c. Specific performance

    d. Mutual rescission
    (d) mutual rescission occurs when all parties to a contract agree to cancel the agreement. Page 73
  30. When using a pre-printed form for a contract, which of the following is not generally true?

    a. Specific information takes precedence over general information

    b. Typed clauses and insertions take precedence over the pre-printed material

    c. Handwritten clauses and insertions take precedence over the typed and pre-printed material

    d. Pre-printed material takes precedence over handwritten and typed insertions.
    (d) generally, when using pre-printed forms: specific information takes precedence over general information; typed clauses and insertions take precedence over the pre-printed material; and handwritten clauses and insertions take precedence over the typed and pre-printed material. Page 71

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